#5. National Saving Certificate (NSC)

National Savings Certificate is a secure low-risk investment option. You can open NSC at any post office even for a small amount of Rs. 100.

The withdrawals are fixed and allowed after 5 years and 10 years of the maturity period. However, you can pledge NSC for taking loans.

You can purchase any amount of NSCs, but investments only of up to Rs 1.5 lacs help you save taxes.

Particulars

Details

Deduction

Rs. 1.5 Lacs

Returns

8%

Withdrawal

5 Years & 10 years

Taxability

Interest earned is taxable

Concerns

Fixed maturity period

Low returns

#6. Unit Linked Insurance Plans (ULIPs)

Investments in ULIPs gives you the benefit of insurance along with wealth creation.

You can claim deduction up to Rs. 1.5 Lacs in respect of all the premiums paid under section 80C.

Particulars

Details

Deduction upto

Rs. 1.5 Lacs

Returns

12% to 14%

Withdrawal

After 5 years

Taxability

Maturity amount is tax-free

Concerns

High management charges

Caution

Please note that investments are focused on generating returns, and thus carry higher risk. Whereas insurance is for protection of life and assets in case of loss and death.

Therefore, both should be considered separately.

#7. LIC Life Insurance Premium

You can save tax on all the amount paid as premium for life insurance. The premium paid can be for self, wife or children.

The deduction can be claimed only when the premium amount is less than 10% of the sum assured.

#8. Children Tuition Fees

Keep all the school fees receipts safe, they can help you save tax. Tuition fees paid to the school, college or university for the education of two children is eligible for tax deduction.

There is no upper limit and all the tuition fees paid qualifies for the deduction.

But you need to keep in mind that the course should be full-time and the educational institute should be located in India.

#9. Repayment of Home Loan

Buying a home is a good way to save taxes. You can save up to Rs. 1.5 Lacs on principal repayment (section 80C). The deduction is also applicable on stamp duty, registration fees and transfer expenses.

Further, there is an exemption up to Rs. 2 lacs on the interest paid (section 24).

If you are a first-time buyer then you can claim an additional deduction of Rs. 50,000 towards interest payment under section 80EE. However, the cost of a house must be less than Rs. 50 Lacs and the loan should be less than Rs. 35 Lacs.

#10. Sukanya Samriddhi Yojana (SSY)

Any deposit of up to Rs. 1.5 Lacs towards the upbringing of your daughter can save you tax under sukanya samriddhi yojana.

Investment in sukanya samriddhi yojana earns you 8.5% p.a. The interest and the maturity amount is tax-free.

The only drawback is that the investment matures after 21 years and partial withdrawals (for specific expenses) are allowed after the girl child turns 18 years of age.

#11. Senior Citizens Savings Scheme (SCSS)

The senior citizen saving scheme is for individuals over 60 years of age or anyone who is over 55 years and has opted for retirement.

You can save tax up to Rs. 1.5 Lacs under section 80C from SCSS. The scheme gives you returns of 8.6% p.a. and matures in 5 years.